Major Homebuilder Goes for an IPO

Taylor Morrison Home is set to ride a bullish tide in housing

Homebuilder Taylor Morrison Home has filed for an IPO and plans to raise up to $250 million. The lead underwriters include Credit Suisse (NYSE:CS) and Citigroup (NYE:C). The proposed ticker is TMHC (the filing doesn’t indicate what exchange the company will list on).

When the offering hits the market, Taylor Morrison will be the sixth-largest public homebuilder in North America (in terms of 2011 revenues). Founded over 75 years ago, the company focuses on single-family detached and attached homes. It also has a strong business operation in Canada (under the Monarch brand).

For the first nine months of this year, Taylor Morrison built 2,586 homes with an average price of $347,000. During this time, revenues soared 47% to $879 million, and EBITDA was $125.1 million. The company has a substantial backlog of 4,205 homes.

The real estate market has been perking up lately. No doubt, record-low mortgage interest rates are one reason. But there has also been a dearth of building. From 2008 to 2011, the average new home starts were 663,000. This compares to an average of 1.55 million between 1960 to 2007.

Wall Street has been aggressively bidding up the homebuilding sector. Consider that shares of KB Home (NYSE:KBH), Ryland Group (NYSE:RYL) and Hovnanian Enterprises (NYSE:HOV) are all up over 100% for 2012. So, the timing for Taylor Morrison’s IPO looks spot-on.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

Tom is routinely quoted in the media about upcoming deals with his interviews on CNBC and Bloomberg TV, but he is eager to take your questions too. You can message him on Twitter at @ttaulli. And feel free to weigh in via the comments section on any of his IPO Playbook posts.